Credit Cards Bad Credit

Bad credit is not the end of the world. It is also not a wonderful position to be in; however, there are ways to rebuild your credit. One such way is via credit cards for those with bad credit. There are two types of credit cards available for anyone that has bad credit, which are unsecured and secured.

Secured credit cards are ones that you place money on and then use the card just like you would any credit card. The reason this is a good idea is that you will only be able to spend the money you have on the card minus the interest rate.

Unsecured credit cards are available for individuals with bad credit. These bad credit credit cards do come with high interest rates; however, as long as you make your payments in a timely manner you will actually be building good credit.

Unsecured credit cards do have annual fees and APR’s that you will have to pay. The amount you have to pay will depend on your credit history and are normally $39 to $59 for annual fees and 14.9% to 19.9% for APR’s. This may sound high (and it is), but the credit card companies are taking a chance on a person that has bad credit.

The good news is that while you pay your credit card monthly you will be improving your credit score, as these credit card companies will be sending your payment history to the credit bureaus. Once you build up a good payment history, you will then begin to see both the annual fees and the interest rates go down.

According to just how bad your credit really is, you may have to begin with a secured credit card. Once you have this credit card and pay timely you will be offered an unsecured credit card from the same company. If you are approved for a secured credit card, in the majority of cases, the minimum-security deposit will be around $200. The APR is lower than with an unsecured card at around 8% or less and the annual fee is close to $35.

The best way to improve your credit is to start finding ways to show you are dependable financially via a credit card. The choice to have a secured or unsecured may not be in your hands at this time if your credit is considerably bad, however, it is a great start on the way to financial recovery.


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